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A firm with 100% equity is valued at $100M in 2018. In 2019, it adds $20M of permanent debt to its capital structure. Tax rate

A firm with 100% equity is valued at $100M in 2018. In 2019, it adds $20M of permanent debt to its capital structure. Tax rate is 20% and interest rate is 5%. Given its industry and business model, distress costs will be roughly $10M. If assets increase by 50% in 2019, what is the new equity value of firm?

$134M

$124M

$130M

$144M

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